THE DEFENCE OF INNOCENT INFRINGEMENT. DOES IT OPERATE AS A DEFENCE TO LIABILITY?

In a recently decided case by the Singapore Court of Appeal – Seiko Epson Corporation v Sepoms Technology Pte Ltd and Another [2007] SCGA 52 - the Court of Appeal had occasion to decide on the operation of the scope of defense of “innocent infringement”. i.e. whether the lack of requisite knowledge of a Patent, is a defense to liability only; or whether the same is a restriction on the quantum of relief allowable to the plaintiff.

The Facts

The plaintiff in this case is a manufacturer of ink jet printers. They proceeded on 5 October 2005 to commence an action for patent infringement against the defendants, who manufactured and sold compatible ink cartridges that could be used to replace ink cartridges produced by the plaintiff. The plaintiff claimed for a declaration of infringement as well as an account of profits derived by the defendant from the alleged infringement.

The defendant proceeded to file a defense and counterclaim wherein they denied there was infringement and that even if the plaintiff’s Patent was infringed the defense of innocent infringement afforded them protection from any claim for damages or an account of profits.

The defendant then entered into a Consent Judgment with the plaintiff wherein they consented inter alia that the Plaintiff’s patent was valid and the defendant was restrained from further selling the infringing product and that there was to be an account of profits by the defendant.

The defendant then, in compliance with the order for an account of profits in the Consent Judgment, filed an affidavit stating that it had first acquired knowledge of the plaintiff’s patent on 7 October 2005 when they were served with the Statement of Claim. The defendant then filed an account of profits for the period from 1 October 2005 to 31 July 2006. The plaintiff was dissatisfied and filed an objection as the plaintiff contended that the period of infringement was in fact from 20 February 1998 i.e. the date of publication of the Patent.

The plaintiff therefore applied to the High Court to compel the defendant to file further accounts for the period 20 February 1998 to 30 September 2005.


In 2007, the Singapore High Court decided on whether an infringing party might use the defense of “innocent infringement”. This case therefore considers the interpretation of Section 69 (1) of the Patents Act (“Act”). The plaintiff’s application was initially heard before the Assistant Registrar who dismissed the same. The plaintiff then appealed to the High Court which upheld the assistant Registrar’s decision. This then precipitated the plaintiff’s appeal to the Court of Appeal.

Section 69(1) Patents Act

The key to this is the section in the Patent’s Act pertaining to “innocent infringement”. Section 69 (1) of the Act provides that: “ In proceedings for infringement of a patent, damages shall not be awarded and no order shall be made for an account of profits against a defendant who proves that at the date of the infringement he was not aware, and had no reasonable grounds for supposing, that the patent existed.”

Therefore based on section 69 (1) the defendants argued that even if there was infringement, they had neither knowledge nor any reasonable grounds to assume that the plaintiff’s Patent existed. In essence, their argument was that this provision presented the defendants with protection from any claim for damages or an account of profits.


Court of Appeal decision

At the Court of Appeal, the issues raised by the plaintiff to be considered by the Court were;

(a) Whether the defense of innocent infringement as set out in the section 69(1) of the Act operated as a defense to liability or merely as a restriction to the relief awardable.

(b) Whether Section 69 (1) of the Act operated as a defense to liability, i.e. whether the defendants were estopped from raising section 69(1) of the Act at the account of profits hearing by virtue of the Consent Judgment which made the issue of liability res judicata..

The plaintiff argued that a proper interpretation of section 69 (1) of the Patents Act would mean that the said section operated as a defense to liability and that as the Consent Judgment was final on the issue of liability, the defendants were estopped from raising section 69 (1) at the hearing of the account of profits, which was concerned with the relief allowable and not liability.

The defendant however argued that they were not estopped from raising section 69 (1) of the Act, as they contended that a proper interpretation of the aforesaid section merely operated to restrict the quantum of relief awardable.

The Judges in the Court of Appeal found little to support the argument that section 69 (1) was intended to operate as a defense to liability. The Court had no direct authority on point and went on to consider the explanatory statement in the Bill which was read in Parliament before the Act was passed. Wherein the comment that section 69 was for restricting the recovery of damages in the case of innocent infringement was held to construe the section as affording a defense going to the relief allowable, rather then a defense impugning a finding of infringement i.e. a defense to liability.

The Court also considered the heading and marginal notes which now stated “Restrictions on relief for infringement”. Thereby finding that a plain reading of the same would suggest that section 69 was enacted as a restriction on the relief allowable after a finding of infringement. However, before arriving at the proper interpretation of the aforesaid section, the Judges were careful in considering the concept and elements of “defense to liability” in the context of patent infringement. The Court also relied on the obiter dictum in the case of Institut Pastuer v Genelabs Diagnostics Pte Ltd [2000] SGHC 53 which stated that innocent infringement is no defense to a claim for infringement of a Patent save for the question of whether damages are to be awarded.

The Court of Appeal stated that “if the presence of liability in the present appeal is in substance synonymous with the presence of patent infringement, only principles or rules which operate to negate a finding of infringement should be considered to operate as “defenses to liability”, and this is the meaning we ascribed to this expression for the purpose of this judgment.” Accordingly, the Judges concluded that on a true interpretation, section 69 (1) was a restriction on the relief awardable and not a defense to liability.

Furthermore from the perusal of the Bill and headings as discussed above it is clear that Parliament’s intention for section 69 (1) is to operate to restrict the relief awardable but not to operate to negate a finding of infringement. As such and as mentioned above, the Judges at the Court of Appeal came to the conclusion that section 69 (1) cannot be considered to operate as a defense to liability.

The Judges also considered the other important issue on whether the Consent Judgment was being final on liability and whether it was also considered final on the applicable accounting period as well. The plaintiff’s counsel submitted that the effect of the Consent Judgment in particular to the defendant providing an account of profits, was that it clearly implied that the defendants had agreed to having infringed the Patent from the date alleged by the plaintiff.

The counsel for the defendant rebutted the above on the grounds that the Consent Judgment was final only on the issue of the defendants being infringers of the Patent hence final only on the issue of liability.

It was held that the Consent Judgment specified that it was final only on the point of liability. Nothing in the factual matrix permitted another interpretation. As for the accounting period, it was to be determined at a later stage. The judges went on to emphasize that it would be illogical for the defendants in agreeing to the Consent Judgment to have forgone their legal right to raise section 69 (1) as this would have caused the defendants to be accountable to the plaintiff for profits over a longer period then that would have applied, had they not agreed to the Consent Judgment.

Accordingly, the plaintiff’s entire appeal was dismissed with costs. Therefore this case makes it clear that the position in Singapore is that defense of “innocent infringement” relates to the quantum of damages and account of profits but not to liability for infringement.